How Pharmaceutical Serialization can help Reimagine Business Models

This is the first part of a two-part blog. You can access part two here.

Major markets such as the US, European Union, China and Brazil and a host of other countries are promulgating regulations for the serialization of prescription drugs. See timeline here.

The objective of such regulations is to tighten the pharmaceutical supply chain and prevent counterfeit prescription drugs from penetrating the distribution pipeline. This ensures that the patient gets genuine, unadulterated medicine.

According to a World Health Organization bulletin, sales of counterfeit drugs in 2010 were over US$ 75 billion and growing.

What exactly is the regulation?

Serialization regulations contain two parts.

The first part is serialization, which calls for affixing (printing) a randomized serial number on a prescription drug. Serialization helps authenticate the product.

The second part is track and trace (also known as pedigree), which requires exchanging product information along with a certification for every sale/purchase transaction between genuine parties. This authenticates the transaction between authorized players in the legal supply chain such as manufacturers, wholesalers, distributors and retailers.

Only when both, the product and the transactions, are authenticated, will the regulations work.

This is very similar to a CarFax report, in which the VIN (vehicle identification number) identifies the car, and the report then contains various details each time the car changed ownership.

For serialization of prescription drugs, the VIN is analogous to the serial number, and the track and trace regulations document each change in ownership of the prescription drug across the legal supply chain.

Technology and serialization

It is one thing to have regulations and another to ensure that regulations can be complied with. Tracking and tracing every single serial number requires sophisticated systems and technology in place that can deal with billions of transactions, at very high speeds. Serialization begins with printing a randomized serial number on packaged vials at speeds ranging from 50-150 vials per minute. High-speed printing and number verification equipment also become necessary.

Given that there were more than 4 billion prescription drugs filled at pharmacies in the US alone (in 2015), one can imagine the volume of drugs that need to be serialized worldwide. Such compliance would be unthinkable a decade ago, when information systems were not as advanced.

Today with SAP’s ATTP (Advanced Track and Trace for Pharmaceuticals), Pharma Network, other digital solutions, and sophisticated printing/verification technology, regulations that cover billions of complex transactions can be complied with.

Serialization and Digital Marketing

Serialization reduces the product to a lot (or batch) size of one.

This makes it is possible to map out the path of a single prescription drug from the time it was packaged at the manufacturer’s facility, until the time it was consumed by a patient.

To explore and understand the ramifications of this lot size of one, let us also look at one key facet of digital marketing.

Digital marketing, with finer segmentation of the customer, helps isolate a single customer and understand his or her behavior. i.e. digital marketing helps us look at a customer lot size of one.

With connected healthcare, it is possible to associate a serialized product such as a vaccine with a single customer, when delivered using a connected healthcare device, such as a pre-filled vaccine dispenser.

With social listening it is possible to understand how a group (or tribe) of people engage with a certain product or service. It must be noted that there are strict regulations on capturing individually identifiable health data.

In decades past, it used to take a long time to understand how products were being used. The hair restoration drug Rogaine was an accidental discovery after blood pressure medication Minoxidil was causing unintended hair growth. It took a long time for the makers of Minoxidil to understand consumers’ feelings about the drug, the possibilities of treating another condition and then to pivot and market a new product.

In the age of digital marketing, the time to understand consumer’s engagement with a product is far quicker.

Benefits of serialization:

Collectively taken together, how can these trends in serialization regulations, advancements in digital marketing and greater area of regulations coverage help reimagine businesses?

While serialization regulations only target prescription drugs at this time, it is logical that such regulations will extend to cover over-the-counter medications, food, and even cosmetics and other topical applicants.

Once serialized food and medicine become ubiquitous, the real benefits to consumers will come from the big data analytics associated with serialization.

Serialization offers significant opportunities for discovering new revenue growth engines, and also for reimagining businesses.

Click here for part 2 of this blog-post in which we will look at four industries that are impacted currently by serialization regulations.